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Have you ever had a tax examination in an IRS office? How did you prepare for it? how long did it take? was the result as you had expected? what would have you done differently?
Just once. I read a book on about it and the best advice from that book was JUST ANSWER EVERY QUESTION YES, OR NO. DO NOT ELABORATE. That was very hard for me to do, I'm nicknamed "windy", but I did it and was I ever glad, a couple of elaborations could have cost me more than what I ended up getting hit.
BTW, I'm pretty sure the reason I got audited was because the CPA was on a "questionable practitioners list" (something I learned about from that book), talking to about 6 other clients of the CPA I learned that they were all being audited. That was the first, AND LAST year that I used that CPA. Also the first and last time that I got audited. She made some major mistakes.
Did you hire an EA or tax attorney to represent you during the examination? how do I know if my CPA is on IRS's questionable practioners list?
Quote:
Originally Posted by golfgod
Just once. I read a book on about it and the best advice from that book was JUST ANSWER EVERY QUESTION YES, OR NO. DO NOT ELABORATE. That was very hard for me to do, I'm nicknamed "windy", but I did it and was I ever glad, a couple of elaborations could have cost me more than what I ended up getting hit.
BTW, I'm pretty sure the reason I got audited was because the CPA was on a "questionable practitioners list" (something I learned about from that book), talking to about 6 other clients of the CPA I learned that they were all being audited. That was the first, AND LAST year that I used that CPA. Also the first and last time that I got audited. She made some major mistakes.
I prepared for it by talking to a tax attorney whom I could not afford to hire, but who kindly coached me through the process.
It makes a difference what branch/office of the IRS you are dealing with. If it is the end-of-the-line process where you're dealing with IRS collections this is actually a good thing.
By the time your case has been assigned to collections, and providing that you're a regular American without tremendous tax debt and without much in assets--well, there's not a whole lot they can do. Vicious threatening is about the limit of their performance.
They will do a lot of posturing, they will make a lot of empty threats, they will try everything in the book to intimidate you--they are in the business of being collection agents. Treat them as such. IRS collections are the bottom of the barrel employees. Lower than life insurance boiler room consignees. They get a percentage.
Several important points:
1) NEVER, do not sign an agreement allowing the IRS to pursue the alleged debt beyond the currently running statute of limitations. Chances are if IRS collections is pursuing you, that the legal time limit to extract the alleged back taxes is running out. They will try to pressure you into signing an extension to collect owed back taxes. DO NOT sign this paper. NO! You are under no obligation to sign any such thing.
2) There is an internal program in the IRS, something called like the taxpayer protection mitigator (somebody help me here, I forgot the exact name of this position) which allows you the tax payer, to have an IRS negotiator working on your side against IRS collections. These people are invaluable. Their services are free! And they are IRS employees.
Be sure you have no verifiable assets that can be seized, primarily bank accounts. If you have any money......move it somewhere......
3) Don't lie. Back up your side with documents. Whatever they are claiming you owe, have a hundred and one documents proving otherwise. Never believe a word they say.
During the time I went through this, the IRS positioned that I owed over $5,000 in taxes and penalties including late charges and "fraud". When we were all finished, the calculation had dropped to $300, which I paid. In fact if I hadn't requested a IRS taxpayer mitigator (the attorney told me such employees existed or I would never have known) the story wouldn't have been so happily and cheaply ended.
But for the love of god, no matter how frightened and intimidated you may feel during such an examination--don't sign ANYTHING.
Did you hire an EA or tax attorney to represent you during the examination? how do I know if my CPA is on IRS's questionable practioners list?
No, I read up on the process and KEPT MY MOUTH SHUT, beyond answering yes and no.
I found out after the fact. Anyone who is that bad is either gone from being a CPA in short order, or is probably doing tax returns for Mafia guys and gets looked at pretty closely.
The other thing that they HAVE TO DO, is send you notice of WHAT they are looking at specifically. Usually it will be about 2 or 3 things. They will attach information sheets regarding those items and WHAT PAPERS YOU SHOULD BRING WITH YOU.
Have you gotten a notice, or are you just borrowing trouble? The actual odds of getting audited, much less going in for an audit are infintesimal.
Location: Stuck on the East Coast, hoping to head West
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If I could afford it, I would get an EA or a CPA who SPECIALIZES in taxes. EA specialize in taxes. CPA doesn't necessarily mean that they specialize in taxes.
If you do have representation, I'd advise not going at all and letting your EA/CPA/Attorney represent you.
If you do end up going, don't volunteer information and have all supporting documents. I'd also not drive there in an expensive vehicle, wear jewelry, expensive suit or even engage in small talk about vacations you've taken or planning to take. They'll generally be super nice and friendly--be courteous, but don't help them along with their fishing expedition.
Thanks. This is really informative! So you did not hire an attorney, but he volunteered his service by coaching you? How do i get in touch with him?
Quote:
Originally Posted by azoria
Yes, I went through this some years ago.
I prepared for it by talking to a tax attorney whom I could not afford to hire, but who kindly coached me through the process.
It makes a difference what branch/office of the IRS you are dealing with. If it is the end-of-the-line process where you're dealing with IRS collections this is actually a good thing.
By the time your case has been assigned to collections, and providing that you're a regular American without tremendous tax debt and without much in assets--well, there's not a whole lot they can do. Vicious threatening is about the limit of their performance.
They will do a lot of posturing, they will make a lot of empty threats, they will try everything in the book to intimidate you--they are in the business of being collection agents. Treat them as such. IRS collections are the bottom of the barrel employees. Lower than life insurance boiler room consignees. They get a percentage.
Several important points:
1) NEVER, do not sign an agreement allowing the IRS to pursue the alleged debt beyond the currently running statute of limitations. Chances are if IRS collections is pursuing you, that the legal time limit to extract the alleged back taxes is running out. They will try to pressure you into signing an extension to collect owed back taxes. DO NOT sign this paper. NO! You are under no obligation to sign any such thing.
2) There is an internal program in the IRS, something called like the taxpayer protection mitigator (somebody help me here, I forgot the exact name of this position) which allows you the tax payer, to have an IRS negotiator working on your side against IRS collections. These people are invaluable. Their services are free! And they are IRS employees.
Be sure you have no verifiable assets that can be seized, primarily bank accounts. If you have any money......move it somewhere......
3) Don't lie. Back up your side with documents. Whatever they are claiming you owe, have a hundred and one documents proving otherwise. Never believe a word they say.
During the time I went through this, the IRS positioned that I owed over $5,000 in taxes and penalties including late charges and "fraud". When we were all finished, the calculation had dropped to $300, which I paid. In fact if I hadn't requested a IRS taxpayer mitigator (the attorney told me such employees existed or I would never have known) the story wouldn't have been so happily and cheaply ended.
But for the love of god, no matter how frightened and intimidated you may feel during such an examination--don't sign ANYTHING.
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